VOA常速英语:As Fighting Continues, Libyan Oil Production Remains Volatile

As fighting between rival government forces in Libya continues, the country’s oil production sharply rises and falls. Production was reported to be 900,000 barrels a day in September, but that fell to about 500,000 barrels by November. Nevertheless, there’s plenty of crude available to meet world demand.
 
 Libyan crude oil is among the world’s best because it can be refined into many products. But it no longer has the same market share it once did.
 
“It’s a very light crude. The world actually now has a lot of light cruder because of the surge in U.S. production. But still you get a very high yield of transportation fuels – distillate, gasoline – that kind thing," said John Kingston, global director of news for Platts, a leading provider of energy sector information. "So you get a lot of the transportation fuels that have the most value and fewer of the fuels that have lesser value. So, it’s always been considered like the champagne of crudes.”
 
Kingston said that Libyan oil production almost disappeared after the fall of leader Moammar Ghadafi. It collapsed from more than a one-and-a-half-million barrels a day to just 50,000.
 
“It then kind of hung around like a hundred thousand barrels a day, 150,000 barrels a day. And then starting sometime in the summer it just shot up and got up to about a million barrels a day by the end of October. That is a staggering growth," he said. "I don’t know that I’ve ever seen growth from one country that fast to be honest. That was kind of like the last tipping point in the market that pushed it to its current decline because the market was just not prepared to absorb all that Libyan oil.”
 
Kingston said Libyan oil hit the market when crude was already plentiful -- so it was difficult to get the market share that Libya wanted.
 
“The only way it could have done so is if the Saudis really step back and cut their production," he said. "And they weren’t going to give up 800-, 900,000 barrels a day of their own market just to make room for the Libyans. And it’s a different kind of crude, anyway. So I think the Libyan surge really did destabilize the market, which is, you know, good for consumers. Now in the past couple of days there’s been a downturn. There have been some problems out at the [El] Sharara field and the Elephant field. The two of those share a power source so when one went down they both went down.”
 
Libya’s turmoil makes it very difficult to forecast what will happen on the world oil market.
 
“That’s crazy volatility from one country in their supply lines. You just normally don’t see that,” Kingston said.
 
Keeping track of the rival militias, he said, is another problem.
 
“It is very difficult I would say to follow the players without a scorecard. But I would just say that in terms of trying to measure the oil market the Libyans are a giant swing factor. Maybe more of a swing factor than I’ve ever seen in a short run in a long period of time.”
 
Despite the chaos in the country, Kingston said, Libya manages to sell its oil with little trouble.
 
“Libya sells its own through the National Oil Corporation. Somebody commented a few years ago that in the craziness that was Libya the NOC was essentially the only sort of rational, Western-looking institution in the entire country. Oh, they have no problem doing that. That’s not an issue,” he said.
 
He said despite the fighting, no company appears unwilling to deal with the Libyans.
 
OPEC – the Organization of the Petroleum Exporting Countries – meets November 27 in Vienna. The meeting comes amid forecasts that world oil demand next year will be under what OPEC is expected to produce. The Platts global director of news said that could create a market share war and a price collapse. Despite that, Kuwaiti’s oil minister said he does not expect OPEC to cut its output.